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As small businesses and micro enterprises are still reeling under the impact of Covid, there is a need to accord a special focus possibly through the formation of an independent Ministry for self-employed and micro businesses to address specific issues facing this segment, pointed out the Consortium of Indian Associations (CIA).
“Though the government has been talking about the ‘ease of doing business’, Micro Entrepreneurs continue to be governed by complicated and outdated laws and dispensable compliance burdens,” CIA said. Given this, the Association feels that the government should redraft these laws,” K E Raghunathan, Convenor of CIA said in a statement.
CIA also proposed that the Government should amend the Micro, Small, and Medium Enterprises Development Act, 2006, to strengthen the state facilitation councils.
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Micro Small Enterprises Facilitation Centres should be given more power to conduct their proceedings in a transparent and time-bound manner and enforce payment of the specified interest to the aggrieved MSMEs. The government also needs to make changes to the GST Act to make it SME-friendly.
“Many of the central government schemes are not propagated or used by State Governments, thereby limiting the beneficiaries,” he said.
About the survey
These recommendations are based on the report of a mega nationwide survey conducted by the 25 Associations during February 2-8, post-the presentation of the Union Budget for 2023-24.
The survey collected opinions of 1,08,500 self-employed and small businesses that include manufacturers, service providers, and exporters.
About 63 million micro and small enterprises (MSEs) and 40 million self-employed were hit hard by the pandemic and the consequent lockdown. As their work was unaffected in the past year, the survey sought to find out the recovery of business in this segment.
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During the last five years, the performance of 72 per cent of the respondents is either stagnant, decreasing, stopped, or wound up. Only 28 per cent of the respondents have confirmed that they are growing. 82 per cent of the respondents are demanding a separate ministry for Micro Enterprises for better concentration and support. 87 per cent feel the budget is disappointing or a big let down have no comments.
On the main issues faced by the entrepreneurs, 79 per cent of the respondents felt that access to bank finance was their big issue. Around 42 per cent cited profit margin concerns, 70 per cent are concerned about delayed payment receipts, 40 per cent about raw material price and availability, 52 per cent find adherence to statutory compliances is tough, 62 per cent are worried about demand and order book position and 38 per cent have fear of manpower sourcing and employability skills in the youth.
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